Firm-Created Word-of-Mouth Communication: Evidence from a Field Test

“Currently, social media practice is one where brands encourage consumer engagement online (Chae et al. 2017; Godes and Mayzlin 2009), yet the implications for how these types of actions on the part of the brand to integrate online social media actions and real-life behavior play out are unclear.”

“Similarly, most work on word of mouth effects has examined word of mouth volume, or how frequently a particular product or brand is mentioned (e.g., Chevalier & Mayzlin, 2006; Godes & Mayzlin, 2009).”

“Godes and Mayzlin (2009) analyze the creation of EWOM by the company itself and find that such firm-initiated EWOM has a stronger effect on less loyal customers and noncustomers than on loyal ones, and Kozinets et al. (2010) distinguish different ‘‘social media communication strategies.’’”

“, general positivity and negativity) of interactions from UGC and online WOM (Godes and Mayzlin 2009), it is thus not clear yet in the literature as to what the relative marketing effectiveness of MGC (which typically is overtly positive) and UGC on consumer purchases is.”

“Research refers to this as the persuasion effect or informational influence of eWOM (Godes and Mayzlin 2009; Rui, Liu, and Whinston 2013).”

“Second, this modeling approach enables one to distinguish between interdependencies: for example, Goldenberg et al. (2010) used it to explore network externalities by adding a threshold to the decision rule.”

“Thus, we form two research objectives that are relevant for companies, brand managers, and scholars (Godes and Mayzlin 2009; Kozinets et al. 2010; Dellarocas, Zhang, and Awad 2007): (1) To investigate the effects of firm-created and user-generated social media communication on brand equity, brand…”

“Testing the heavy-user hypothesis for a product with significant perceived risk and ambiguity complements the study by Godes and Mayzlin (2009) of a low-risk product enjoying very little marketing support and for which contagion operated most likely by boosting awareness rather than evaluation.”

“Some recent empirical research in marketing (e.g. Godes and Mayzlin 2009) has followed this interpretation and has treated ratings scales as interval scales.”

“For this, companies send product packages to consumers and ask them personally to talk about the brand to their friends and acquaintances (Godes and Mayzlin, 2009).”

“Social media marketing enables word-of-mouth (WOM) advertising campaigns, inducing brand awareness and increasing sales revenue (Godes & Mayzlin, 2009; Kumar & Mirchandani, 2012), and also promotes a firm’s relationships with prospects, which makes it easy to accurately target consumers.”

“As long as the social contagion occurs at the awareness stage through simple information transfer, hubs are not more persuasive than other nodes (Godes and Mayzlin 2009; Iyengar, Van den Bulte, and Valente 2011).”

“…generates more than 3.3 billion brand impressions each day (Keller and Libai 2009), and affects everything from the products consumers buy to the drugs physicians prescribe (Godes and Mayzlin 2009; Iyengar, Van den Bulte, and Valente 2009; Leskovec, Adamic, and Huberman 2007; Moe and Trusov 2011).”

“Unfortunately, evaluating the effects of viral product design features is difficult because peer effects and WOM are typically endogenous (Manski 1993; Godes and Mayzlin 2004, 2009; Hartmann et al. 2008; Aral et al. 2009; Aral 2011).”

“For example, in both experimental and field settings, Godes and Mayzlin (2009) find that, for a product with a low initial awareness level, WOM that is most effective at driving sales is created by less loyal customers and occurs between people who are not close acquaintances.”

“…of mouth and online reviews have been shown to foster the spread of information (Goldenberg, Libai, and Muller 2001), boost new customer acquisitions (Schmitt, Skiera, and Van den Bulte 2011), and increase sales in various product categories (Chevalier and Mayzlin 2006; Godes and Mayzlin 2009).”

“Whereas the focus of many studies, such as Godes and Mayzlin (2009), is on the influ-encer side of the equation—whether better connected adopters exert more influence than do less connected ones—we position ourselves on the susceptibility to influence side of that equation, since peer influence also…”

“Research has also suggested a link between the dispersion of online WOM related to a television show and its ratings (Godes and Mayzlin 2004), pointing to the possible value of online conversations in generating buzz.”

“…social networks in the real world makes our methodology and findings particularly relevant for practicing managers and academics who are interested in understanding the return on investment of marketing activity to opinion leaders (e.g., Godes and Mayzlin 2009). and behavior of other physicians).”

“To examine the impact of social media brand communications, it is necessary to distinguish between two different forms of them: (a) firm-created and (b) user-generated social media communication (Godes and Mayzlin, 2009).”

“Research has also explored performance impacts of onlineWOM (Chevalier and Mayzlin 2006; Godes and Mayzlin 2009) and how owned and earned media, including social media, affect sales (Stephen and Galak 2012).”

“while potential buyers have numerous considerations when selecting a product and deciding to purchase it, online product reviews do influence product evaluations [15, 26].”

“Thus, marketing through social media channels is regarded as one the most cost-effective means of communication and useful approaches to obtain customers’ information (Godes and Mayzlin, 2009).”

“Many studies have examined how consumers influence each other and marketing-related outcomes in these settings (e.g., Chae et al. 2017; Godes and Mayzlin 2004, 2009; Minnema et al. 2016; Srinivasan, Rutz, and Pauwels 2016; Stephen and Galak 2012).”

“According to Granovetter’s (1995) theory of embeddedness, there is “widespread preference for transacting with individuals of known reputation,” and there is no better basis for trust than our own past dealings with people.”

“Whereas in these studies, the firms create and largely remain in control of the viral marketing messages, Godes and Mayzlin (2009) analyze a unique form of communication among consumers, in which the firm initiates the process but does not prescribe the message content.”

“…from enough personal historical data for such predictions, the reputation of other individuals, of a firm or of a product is a socially shaped opinion based on aggregate experiences, shared through word of mouth, coverage in the popular press and so on (Dellarocas, 2003; Godes and Mayzlin, 2009).”

“Prior research has focused primarily on consumer reviews on online shopping websites and discussion forums around books, movies, TV shows, hotels, and restaurants (Chevalier and Mayzlin 2006; Forman et al. 2008; Godes and Mayzlin 2004, 2009; Archak et al. 2011; Ghose and Ipeirotis 2011).”

“…has substantial implications for sales and other marketing outcomes (Godes and Mayzlin 2004, Chevalier and Mayzlin 2006, Liu 2006, Duan et al. 2008, Godes and Mayzlin 2009, Trusov et al. 2009, Chintagunta et al. 2010, Stephen and Galak 2012, Tirunillai and Tellis 2012, Kumar et al. 2013, Gopinath…”

“…(Frenzen and Nakamoto 1993; Wilcox and Stephen 2013), subsequent empirical work has primarily viewed and assessed tie strength in terms of frequency of observable interactions between both sides of a social dyad (Bakshy et al. 2012; Brown and Reingen 1987; Godes and Mayzlin 2004; Weimann 1983).”

“Moving beyond referral programs specifically, our study indicates that a stronger focus on stimulated as opposed to organic WOM is worth considering (Godes and Mayzlin 2009 ).”

“Consider a firm that manages word-of-mouth activity (Godes and Mayzlin 2009) by incentivizing consumers to post online product reviews.”

“” Consumer buzz refers to user-generated word-of-mouth messages, such as product reviews that are voluntarily posted on a website by consumers about their consumption experiences [10, 28, 70].”

“In others words, positive WOM not only augments the reach of a luxury brand, but also its relevance, particularly within new target groups that have previously only had limited exposure to the brand (Godes & Mayzlin, 2009; Kim & Ko, 2012).”

“Previous research has noted the increasing propensity of firms to attempt to initiate word-of-mouth communications among existing and potential customers (Godes and Mayzlin 2009).”

“More specifically, Godes and Mayzlin (2009) study how loyalty of the disseminators of WOM toward a brand (e.g., frequency of purchases) facilitates WOM and demonstrate that firms should look for less loyal customers to spread WOM.”

“Firm-created social media allows the firm to have full control over their communication topic and to focus on its target audience (Godes & Mayzlin, 2009; Goh, Heng, & Lin, 2013).”

“Finally, recent work in social media participation has highlighted the role of consumer characteristics and the differing reactions of various consumer segments to firms’ social media initiatives (Chen and Xie 2008; Godes and Mayzlin 2009; Rishika et al. 2013).”

“In the meantime, hotel managers can regularly post their product and service information (Zhang et al., 2009) and also proactively induce their consumers to spread the word about their products online (Godes & Mayzlin, 2009).”

“However, active firm promotion of word of mouth has also been found to be effective offline (Godes and Mayzlin 2009).”

“Further, the rapidly growing literature on social contagion has shown that social proximity to others can influence whether consumers try new goods and services (Bell and Song 2007; Godes and Mayzlin 2009; Iyengar et al. 2011).”

“The two procedures were drawn from previously validated procedures and measures (Chen et al., 2011; Godes & Mayzlin, 2009).”

“Prior work on online WOM has shown that its impact or persuasiveness depends on factors such as the characteristics of the reviewer (e.g., Godes and Mayzlin 2009) and the characteristics of the review itself, such as its linguistic characteristics (e.g., Schellekens, Verlegh, and Smidts 2010).”

“However, Godes and Mayzlin (2008) showed that WOM programs may trigger referrals from customers who would otherwise would not be reached otherwise, and they may be effective if they are not perceived as blatant persuasion attempts.”

“In the context of online social media, the literature has examined the roles of influencers in consumer marketing (e.g., Goldenberg et al. 2009; Gong et al. 2017; Katona, Zubcsek, and Sarvary 2011) and opinion leaders in business marketing (Hada, Grewal, and Lilien 2014; Iyengar, Van den Bulte, and…”

“Along with Goldenberg et al (2009), they characterize individuals who follow a large number of others as information seekers while those who are followed by others are characterized as information disseminators.”

“Finally, in a recent paper, Godes and Mayzlin (2009) explore the effects of firmgenerated WOM communication.”

“We consider situations in which consumers have been prompted to post, as this imitates real social media practice wherein brands encourage posting and engagement from consumers (Chae et al. 2017; Godes and Mayzlin 2009).”

“Specifically, a firm may encourage current adopters to exert more influence on their peers (Godes & Mayzlin, 2009) or alternatively may increase the susceptibility of potential customers to the influence of their peers (Aral & Taylor, 2011); some firms may choose to do both.”

“…but, to our knowledge, only in the realm of new product adoption (e.g., Aral and Walker 2012, Goldenberg et al. 2009, Hu and Van den Bulte 2014, Iyengar et al. 2011a, Katona et al. 2011) or outside the realm of new products altogether (e.g., Godes and Mayzlin 2009, Trusov et al. 2010).”

“(Godes and Mayzlin 2009).”

“Practical Implications Marketers are increasingly interested in proactively managing customer-to-customer communication (Godes and Mayzlin 2009).”

“The marketing literature has documented thatWoM, especially from significant others, has a decisive influence on consumers' purchasing decisions (Chevalier & Mayzlin, 2006; Godes & Mayzlin, 2009).”

“…multiple distribution stages, and their relationship with other aspects of consumer behavior, such as observational learning, or firm decisions, such as participation in stimulating WOM (Godes and Mayzlin 2009) or whether to provide review platforms (Chen, Wang, and Xie 2011; Chen and Xie 2008).”

“Godes and Mayzlin (2009) empirically study how firms should strategically recruit customers for WOM campaigns based on loyalty considerations to drive sales.”

“! ! #! significant impact on online community members, empirical research is only beginning to analyze how online social communities help users discover and diffuse new content [2, 23, 24, 42].”